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Yahoo Inc. is going into the ring to defend itself against patent infringement claims by NCR Corp. NCR — a leading manufacturer of ATMs and formerly known as National Cash Register — sent Yahoo a letter two months ago, claiming the Sunnyvale, Calif.-based Internet portal infringed 10 of its computer patents and demanding a licensing fee. With millions of dollars potentially at stake, Yahoo filed suit against NCR in San Francisco federal court Dec. 13, seeking a court order that it is not infringing NCR’s patents and that NCR’s patents are invalid. The case is significant because it involves broad patents that appear to cover basic Internet functions worth millions of dollars in licensing revenue. “You have a player here who is claiming to have a patent portfolio that covers filling orders over the Internet,” said Yahoo attorney Harold McElhinny, a partner at San Francisco-based Morrison & Foerster. NCR is saying it “owns the Internet, at least on the delivery of products side.” McElhinny contends that NCR is “trying to roll up the industry.” According to Yahoo’s complaint, within the past four years NCR has sued at least four companies, claiming they infringed two or more NCR patents. The companies sued by NCR include AOL Time Warner Inc., which McElhinny said settled with NCR on the eve of trial. McElhinny said NCR also has sent letters demanding licenses from at least 15 companies. Bruce Langos, NCR’s vice president of operations and intellectual property management, declined to discuss any litigation involving its patents. “NCR has made a significant investment in intellectual property, and we will defend it vigorously,” Langos said. The patents at issue in the Yahoo case cover “ordering and downloading resources from computerized repositories;” a “computer system for management of resources;” and a “mechanism for dependably managing Web synchronization and tracking operations among multiple browsers,” among other claims. According to NCR’s annual report, the Dayton, Ohio-based company owns about 1,500 patents in the United States. While it has pursued claims against other companies, NCR has also warded off infringement suits brought against it. Earlier this year, an appeals court upheld a lower court decision that NCR’s retail customers were immune from infringement claims brought by inventor Jerome Lemelson’s estate with regard to NCR’s bar code scanners. The stakes in its battle with Yahoo may be similarly high. NCR is “asking for lots of money,” McElhinny said, “enough to make it worthwhile to seek a declaratory judgment.”

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